Correlation Between Chongqing Brewery and Fujian Longzhou
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By analyzing existing cross correlation between Chongqing Brewery Co and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Chongqing Brewery and Fujian Longzhou and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Chongqing Brewery with a short position of Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Fujian Longzhou.
Diversification Opportunities for Chongqing Brewery and Fujian Longzhou
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Fujian is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran and Chongqing Brewery is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Chongqing Brewery Co are associated (or correlated) with Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Fujian Longzhou
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to generate 0.54 times more return on investment than Fujian Longzhou. However, Chongqing Brewery Co is 1.85 times less risky than Fujian Longzhou. It trades about -0.26 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about -0.37 per unit of risk. If you would invest 6,442 in Chongqing Brewery Co on October 11, 2024 and sell it today you would lose (680.00) from holding Chongqing Brewery Co or give up 10.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| Chongqing Brewery |
| Fujian Longzhou Tran |
Chongqing Brewery and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Fujian Longzhou
The main advantage of trading using opposite Chongqing Brewery and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Fujian Longzhou can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Chongqing Brewery vs. Miracll Chemicals Co | Chongqing Brewery vs. China Life Insurance | Chongqing Brewery vs. Xinxiang Chemical Fiber | Chongqing Brewery vs. Shenzhen Noposion Agrochemicals |
| Fujian Longzhou vs. AVCON Information Tech | Fujian Longzhou vs. CITIC Guoan Information | Fujian Longzhou vs. Sublime China Information | Fujian Longzhou vs. Digital China Information |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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